How to Better and Safely Integrate Legal Holds, Collection and Review in E-Discovery

Catalyst_Safely_Integrate_Legal_HoldsDid you know that messing up a litigation hold can get you criminally indicted?

It happened to Volkswagen AG. Its mishandling of a legal hold resulted in the federal indictment of six current and former employees on charges of perjury and obstruction of justice. And to add insult to injury, an in-house lawyer was named an unindicted co-conspirator. On Jan. 11, 2017, VW agreed to plead guilty to the charges and to pay a $2.8 billion penalty.

Nearly $3 billion is one expensive legal hold.

Where VW went wrong was in its handling of the hold. You may remember that VW got itself into a foul-smelling situation when it installed software on its diesel vehicles to cheat on emissions tests. As the government ramped up its investigation, an in-house attorney tipped off employees to an imminent litigation hold and indicated that they should “check” certain documents on their computers pertaining to the investigation. The employees took this as code to mean they should delete the documents, which they did.

That may be an extreme example, but it is a reminder of the importance that legal holds be done right. That has been the rule in e-discovery ever since U.S. District Judge Shira Scheindlin issued her seminal 2003 rulings in Zubulake v. UBS Warburg. She put lawyers on notice that, once a party reasonably anticipates litigation, it must implement a litigation hold to ensure the preservation of relevant documents.

The legal hold duty is a duty to preserve. It requires a party to identify, locate and maintain information and tangible evidence that is relevant to specific and identifiable litigation. Once the duty arises, compliance involves six steps:

  1. Identify relevant custodians.
  2. Inform the custodians of their duty to preserve relevant information.
  3. Provide instructions for doing so.
  4. Monitor compliance.
  5. Keep an audit trail.
  6. Release the hold when appropriate.

Courts have said that failure to transmit the hold in writing constitutes gross negligence.

A Better Way to Manage Holds

The fact is that implementing a legal hold is sometimes easier said than done. And many corporate legal departments put themselves at risk by the way they manage the legal-hold process.

The problem is that corporations often manage legal holds using spreadsheets or standalone systems that are cumbersome and inefficient. The same is true for data collection and preservation, where the process is often manual and error prone.

This was one of the problems Catalyst set out to address when it designed Insight Enterprise, its secure, centralized platform for corporate e-discovery. Among its many features, Insight Enterprise provides an integrated, centralized management platform for legal hold and collection. It lets you issue holds, collect and search documents, and then move them from hold into a central e-discovery management platform for analysis, review and productions.

This approach of managing the entire process through an integrated system gives you greater control and reduces both risk and cost. From within the system, you can issue legal hold notices in just minutes. The system tracks requests and responses, as well as questions from custodians and collection efforts. The system ensures that custodians receive legal hold notices, acknowledge their obligations and receive routine reminders.

The system handles collections in a similar way, providing a defensible and efficient workflow that allows collections to be completed remotely. The system allows you to gather data in a secure manner from many sources, with strong encryption, digital chain-of-custody, and detailed audit trails and reports.

The use of a centralized hold system helps prevent miscommunications, confusion and errors that can spawn unnecessary costs or unwanted compliance issues. An efficient workflow and centralized control panel replace spreadsheets, phone calls and email communications.

And that means you greatly reduce your chance of a messed-up hold or even a criminal indictment.

Learn more about litigation hold in this recorded webinar from Catalyst and ACEDS.


About Bob Ambrogi

Bob is known internationally for his expertise in the Internet and legal technology. He held the top editorial positions at the two leading national U.S. legal newspapers, the National Law Journal and Lawyers USA. A long-time advisor to Catalyst, Bob now divides his time between law practice and media consulting. He writes two blogs, LawSites and MediaLaw, co-authors's Legal Blog Watch, and co-hosts the weekly legal-affairs podcast Lawyer2Lawyer. A 1980 graduate of Boston College Law School, Bob is a life member of the Massachusetts Bar Foundation and an active member of the Massachusetts Bar Association, which honored him in 1994 with its President's Award.